# EUR-Lex - 52013DC0719 - EN

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# 52013DC0719

**AMENDING LETTER No 2 TO THE DRAFT GENERAL BUDGET 2014 STATEMENT OF EXPENDITURE BY SECTION General Statement of revenue Section I – Parliament Section II – European Council and Council Section III – Commission Section IV – Court of Justice of the European Union Section V – Court of Auditors Section VI – European Economic and Social Committee Section VII – Committee of the Regions Section VIII – European Ombudsman Section IX – European Data Protection Supervisor Section X – European External Action Service /* COM/2013/0719 final */**

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AMENDING LETTER No 2
TO THE DRAFT GENERAL BUDGET 2014

STATEMENT OF EXPENDITURE BY SECTION
General Statement of revenue
Section I – Parliament
Section II – European Council and Council
Section III – Commission
Section IV – Court of Justice of the European Union
Section V – Court of Auditors
Section VI – European Economic and Social Committee
Section VII – Committee of the Regions
Section VIII – European Ombudsman
Section IX – European Data Protection Supervisor
Section X – European External Action Service

Having regard to:

– 
the Treaty on the Functioning of the European
Union, and in particular Article 314 thereof, in conjunction with the
Treaty establishing the European Atomic Energy Community, and in particular
Article 106a thereof,

– 
the Regulation (EU, Euratom) No 966/2012 of the
European Parliament and of the Council of 25 October 2012 on the Financial
Regulation applicable to the general budget of the Union[1], and in particular
Article 39 thereof,

– 
the draft general budget of the European Union
for the financial year 2014 presented by the Commission on 28 June 2013[2],

– 
the amending letter No 1 to the draft
general budget of the European Union for the financial year 2014 presented by
the Commission on 18 September 2013[3]

the European
Commission hereby presents to the budgetary authority the amending letter
No 2 to the draft general budget of the European Union for the financial
year 2014 for the reasons set out in the explanatory memorandum.

TABLE OF
CONTENTS

1      Introduction.. 5

2      Update
of Traditional Own resources (TOR) 5

3      Agriculture
and fisheries.. 6

3.1       Main
changes proposed.. 6

3.2       European
Agricultural Guarantee Fund (EAGF) 3⁄4 Market
related expenditure and direct payments  7

3.2.1       Overview.. 7

3.2.2       Detailed
comments. 9

3.3       International
fisheries agreements. 12

3.4       Changes
to the budgetary remarks. 12

4      Delegation
of spending programmes to executive agencies.. 13

4.1       Reasons
for delegation.. 13

4.1.1       Making
the best use of executive agencies. 13

4.1.2       Cost-benefit
analysis: chosen delegation scenario. 14

4.1.3       Refining
the cost-benefit analysis. 15

4.1.4       Adjusting
the ‘steady state’ approach applied in the 2014 DB.. 15

4.2       Proposed
delegation of programmes by MFF heading. 15

4.3       Impact
on human and financial resources in the executive agencies. 16

4.4       Impact
on human and financial resources in the Commission.. 17

4.4.1       Transfer
of tasks to executive agencies: savings in the Commission. 17

4.4.2       Ensuring
overall budgetary neutrality. 18

4.4.3       Keeping
the financial envelopes of programmes unchanged. 19

4.5       Delegation
process: next steps. 20

5      Creation
of function group AST/SC.. 20

5.1       Staff
Regulations review: creation of the new function group AST/SC.. 20

5.2       Impact
on establishment plans. 20

6      Conclusion.. 21

7      Summary
table by heading of the multiannual financial framework.. 22

STATEMENT OF EXPENDITURE BY SECTION

The changes to the
statement of revenue and expenditure by section are available on EUR-Lex (http://eur-lex.europa.eu/budget/www/index-en.htm).
An English version of the changes to these statements by section is attached
for information as a budgetary annex.

1            Introduction

The Amending
Letter No 2 (AL 2) to the Draft Budget for 2014 (DB 2014) covers the
following:

3⁄4 
A revision of the forecast of Traditional Own
Resources (TOR, i.e. customs duties and sugar sector levies) to be received in
2014, to take account of the trend observed in TOR received to date in 2013.

3⁄4 
The line by line updating of the estimated needs
for agricultural expenditure. In addition to changing market factors, the AL 2/2014
also incorporates the impact of decisions in the agricultural sector since the DB 2014
was drawn up, revised estimates of needs for some direct payments, as well as
any proposals, which are expected to have a significant effect during the
coming budget year.

3⁄4 
An update of the situation for International
Fisheries Agreements.

3⁄4 
The consequences, in terms of human and
financial resources, of the foreseen delegation of the management of
operational programmes under the new multiannual financial framework (MFF) to
executive agencies.

3⁄4 
The integration of the new function group AST/SC
in the establishment plans of the EU institutions and bodies.

The net budgetary impact of these changes
is a reduction of EUR 4,9 million compared to the Draft Budget 2014
(including AL 1/2014), in commitment and payment appropriations.

Finally,
by means of this Amending Letter the Commission draws the attention of the
European Parliament and the Council to some necessary measures in case of a
delay in the adoption of certain new legal bases under the 2014-2020 multiannual
financial framework (MFF), and the proposed remedial action that might be
required before the new legal bases enter into force.

The
political agreement on the new MFF was reached in June 2013 and work concerning
the legal bases of certain 2014-2020 programmes is still ongoing. In case some
of these programmes would not be adopted before the end of 2013, this would
create a legal vacuum, in particular for the ongoing programmes which expire at
the end of 2013 and which will be consolidated in new programmes and
instruments. In order to ensure the continuity of implementation of the ongoing
programmes (which are already approved), and given the underlying political
agreement reached in the MFF negotiations on the new programmes and the related
financial envelopes, the Commission intends to continue to make use of the
appropriations for technical assistance and administrative support expenditure
necessary for the proper implementation of programmes, also in the event of a
transitional phase before the final adoption of the new legal bases.

2            Update
of Traditional Own resources (TOR)

In September 2013, the Commission
adopted an Amending Letter to Draft Amending Budget No 6/2013[4], so as to revise its
forecasts for the Traditional Own Resources (TOR, namely customs duties and
sugar levies) to be cashed in 2013. In accordance with Article 16 of Council
Regulation (EC, Euratom) No 1150/2000 of 22 May 2000, this revision
was necessary to take account of a significant shortfall in the customs duties
actually paid into the EU budget by August 2013, as compared to the amount
foreseen to be received by that date.

On that basis, the
Commission proposed to offset the additional shortfall in Traditional Own
Resources of some EUR 1,8 billion (or minus 11 %)
relative to the amount budgeted in DAB 6/2013 by a
corresponding increase of Member States’ GNI contributions in 2013.

Further to the correction
proposed for 2013 in the Amending Letter to DAB 6/2013, the Commission proposes
to adjust the forecast for TOR included in the 2014 DB (EUR 18 086 million)
by revising the estimate for 2014 to EUR 16 186 million, on the basis
of the following assumptions:

3⁄4 
In line with the Amending Letter to
DAB 6/2013, the extrapolated TOR outturn for year-end 2013 would amount to
EUR 14 984 million;

3⁄4 
The forecasted evolution
of extra-EU imports in 2014 agreed in the ACOR meeting
of May 2013 of 8 % is then to be applied to the
extrapolated outturn for 2013.

The resulting shortfall in
TOR of EUR 1,9 billion (or minus 11 %), compared to the initial forecast
included in the 2014 DB, needs to be offset by a corresponding increase of
Member States’ GNI contributions in 2014. The distribution of this impact by
Member State is shown in the budgetary Annex.

3            Agriculture
and fisheries

3.1         Main
changes proposed

According
to the present AL 2/2014, overall appropriations requested for heading 2
in 2014 are estimated at EUR 59 247,7 million. This leaves a
margin of EUR 55,3 million in commitment appropriations below the
corresponding ceiling of the multiannual financial framework. The modifications
proposed in AL 2/2014 are neutral in terms of appropriations as compared
to the DB 2014, both for the European Agricultural Guarantee Fund (EAGF)
and for International Fisheries Agreements.

As in
DB 2014, agricultural expenditure financed under the EAGF in AL 2/2014
is budgeted at its net sub-ceiling for 2014, i.e. EUR 43 778,1 million[5]. The financial
discipline mechanism for direct aids still needs to be applied, as forecasts
for market-related expenditure and direct aids exceed this net sub-ceiling.
However, the forecasted level of expenditure above the ceiling is lower than in
DB 2014 so that the amount of financial discipline can be revised downwards
accordingly. This is the net result of higher assigned revenue estimated to be available
in 2014 (mostly due to an increase in amounts available in 2013 and carried
over to 2014) and revised estimates for needs to cover EAGF expenditure. EAGF
payment appropriations in AL 2/2014 also remain unchanged compared with
the DB 2014, i.e. EUR 43 777 million.

As far as International
Fisheries Agreements are concerned, AL 2/2014 proposes to increase
commitment appropriations by EUR 7,3 million and payment
appropriations by EUR 10,3 million for budget article
11 03 01 Sustainable Fisheries Agreements (SFAs), balanced by a
corresponding reduction on the reserve line.

The following table
summarises the effect of AL 2/2014 on heading 2:

(in million EUR, rounded
figures at current prices)

|| Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

Commitments || Payments || Commitments || Payments || Commitments || Payments

— || European Agricultural Guarantee Fund (EAGF) || 43 778,1 || 43 777,0 || || || 43 778,1 || 43 777,0

— || European Agricultural Fund for Rural Development (EAFRD) || 13 991,0 || 11 655,1 || || || 13 991,0 || 11 655,1

— || European Maritime and Fisheries Fund (EMFF), Regional Fisheries Management Organisations (RFMOs) and Sustainable Fisheries Agreements (SFAs), of which: || 1 017,3 || 765,7 || || || 1 017,3 || 765,7

|| — || Sustainable Fisheries Agreements (SFAs) 3⁄4 Operational line (11 03 01) || 22,4 || 22,4 || + 7,3 || + 10,3 || 29,7 || 32,7

|| — || Sustainable Fisheries Agreements (SFAs) 3⁄4 Reserve (40 02 41) || 122,7 || 122,7 || - 7,3 || - 10,3 || 115,3 || 112,3

— || Environment and climate action (Life) || 404,6 || 263,0 || || || 404,6 || 263,0

— || Actions financed under the prerogatives of the Commission and specific competences conferred to the Commission || 6,3 || 3,0 || || || 6,3 || 3,0

— || Pilot projects and preparatory actions || p.m. || 18,3 || || || p.m. || 18,3

— || Decentralised agencies || 50,4 || 50,4 || || || 50,4 || 50,4

Total || 59 247,7 || 56 532,5 || 0,0 || 0,0 || 59 247,7 || 56 532,5

Ceiling || 59 303,0 || || || || 59 303,0 ||

Margin || 55,3 || || || || 55,3 ||

Of which EAGF || 43 778,1 || 43 777,0 || 0,0 || 0,0 || 43 778,1 || 43 777,0

Sub-Ceiling || 44 130,0 || || || || 44 130,0 ||

Net transfer between EAGF and EAFRD || 351,9 || || || || 351,9 ||

Sub-Margin || 0,0 || || || || 0,0 ||

3.2         European
Agricultural Guarantee Fund (EAGF) 3⁄4 Market related
expenditure and direct payments

3.2.1      Overview

The
purpose of AL 2/2014 is to ensure that the agricultural budget is based on
the most up-to-date economic data and legislative framework. By the month of
September, the Commission has at its disposal a first indication of the level
of production for 2013 and perspectives for the agricultural markets, which is
the basis for the updated estimates of the budgetary needs for 2014. Apart from
taking into account market factors, this AL 2/2014 also incorporates the
impact of any legislative decisions adopted in the agricultural sector since
the DB 2014 was drawn up, proposals made by the Commission, as well as the
outcome of the political negotiations on the new legal bases 2014-2020 for
agriculture.

Overall,
2014 EAGF needs (before applying the ‘financial discipline mechanism’)
in AL 2/2014 are estimated at EUR 45 720 million compared
to EUR 45 653 million in the 2014 DB. This is the net result of
somewhat lower needs in chapter 05 02 ‘Intervention in agricultural
markets’ (- EUR 27 million) and additional needs for chapter 05 03 ‘Direct
aids’ (+ EUR 38 million), for chapter 05 07 ‘Audit
of agricultural expenditure’ (+ EUR 53 million) as well
as for chapter 05 08 ‘Policy strategy and coordination’ (+ EUR 3 million).

Regarding
assigned revenues, the amount assumed to be available in 2014 increases
substantially, from EUR 828 million in the 2014 DB to
EUR 1 464 million in AL 2/2014 (+ EUR 636 million).
This increase mostly results from a carry over of assigned revenues from 2013
to 2014:

3⁄4 
At the time of the preparation of the
2014 DB, it is was too early in the year to make an assumption for the
execution of the EAGF in 2013.

3⁄4 
In fact, part of the 2013 expenditure can be
covered by higher than expected carry-over of assigned revenue from 2012 and
additional assigned revenue resulting from clearance of accounts decisions taken
in 2013. As a consequence, an amount of EUR 615 million of assigned
revenues received in 2013 will not be needed to cover expenditure that same
year.

3⁄4 
The AL 2/2014 incorporates the carry over of
this amount of EUR 615 million from 2013 to 2014, which will reduce
the amount of appropriations requested in the 2014 DB accordingly.

3⁄4 
Furthermore, the Commission expects a small
increase in the assigned revenue freshly generated in 2014
(+ EUR 21 million) resulting from the expected ‘milk superlevy’
based on the figures communicated by Member States within the legal deadline.

As a
result of these updates, commitment appropriations of EUR 44 681 million
would be needed to cover EAGF needs for 2014, including an amount of EUR 424,5 million
to establish the ‘Reserve for crises in the agricultural sector’. As for the
2014 DB, this overall amount exceeds the EAGF net sub-ceiling of EUR 43 778,1 million,
meaning that the appropriations for direct aids need to be reduced by applying
the financial discipline mechanism. However, the amount of the financial
discipline in AL 2/2014 (EUR 902,9 million) is less than
initially estimated in the 2014 DB (EUR 1 471,4 million).
Accordingly, the Commission will propose a new adjustment rate for direct
payments considerably below the level established on the basis of the 2014 DB
(- 2,453658%, as compared to -4,001079%).[6]

After
applying the ‘financial discipline mechanism’, EAGF
needs to be covered in 2014 in AL 2/2014 amount to EUR 45 242,1 million,
compared to EUR 44 606,1 million in the DB 2014. Taking
into account assigned revenue of EUR 1 464 million, EAGF
commitment appropriations requested for 2014 in AL 2/2014 remain (as
in the 2014 DB) at the level of the net sub-ceiling, i.e. EUR 43 778,1 million.
Payment appropriations requested for the EAGF in 2014 also remain unchanged
compared to the 2014 DB, i.e. EUR 43 777 million.

3.2.2      Detailed
comments

05 02 3⁄4 Interventions
in agricultural markets (appropriations
- EUR 263 million)

(in million EUR, rounded figures at current prices)

Interventions in agricultural markets || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

Needs || 2 724 || - 27 || 2 697

Estimated assigned revenue available in 2014 || 228 || + 236 || 464

Appropriations requested || 2 496 || - 263 || 2 233

In general, the hypotheses
underlying this AL 2/2014 confirm the assessment made at the moment of the
2014 DB, with favourable prospects for most agricultural markets. The
modifications proposed by this AL 2/2014 are mostly of a technical nature
and concern small amounts only. Overall needs for intervention measures on
agricultural markets decrease by EUR 27 million compared to the 2014 DB.
Furthermore, EUR 236 million of additional assigned revenues are
estimated to be available for chapter 05 02, so that appropriations
requested can be reduced by EUR 263 million compared to the 2014 DB.

The most important
modifications are briefly explained below.

For fruit and
vegetables, estimated needs for operational programmes of producer
organisations (budget item 05 02 08 03) are somewhat lower (- EUR 5 million)
than assumed for the 2014 DB. This results from an updated assessment of
the actual uptake of the measures and sligthly revised figures for national
plans 2013 and 2014, as well as taking into account the estimated financial
impact of the possible partial reimbursement by the EU budget of national
financial assistance granted by some Member States according to Article 103e(1)
of Regulation (EC) 1234/2007. However, the appropriations proposed in this
AL 2/2014 are actually lower than in the 2014 DB (- EUR 241 million),
because of an increase of revenue assigned to fruit and vegetables of EUR 236 million
.

For the wine sector,
the 2014 DB figures have been updated to incorporate the outcome of the
negotiations on the new Single CMO (Common Market Organisation) Regulation in
the CAP (Common Agricultural Policy) reform, in which the overall amount for
national support programmes increased by EUR 5,6 million[7], as well as to
include the most recent figures on execution of these programmes. Consequently,
the AL 2/2014 proposes an increase of EUR 8 million for budget
item 05 02 09 08.

Modifications for other
plant products/measures (budget article 05 02 11) concern
the POSEI programmes and aid for producer organisations of hops. DB 2014
estimates on the use of the modified ceilings for the POSEI regions[8] have been updated,
resulting in a small additional increase of appropriations (+ EUR 2 million)
for market support measures financed from budget item 05 02 11 04,
while needs for direct aids in these regions (financed from budget item 05 03 02 50
and 05 03 02 52) have been revised downwards. An increase of EUR 2,3 million
compared to the 2014 DB is requested for hops, since the aid scheme for the supporting
of producer organisations will continue following the outcome of the
negotiations on the new Single CMO Regulation.

For milk and milk
products, the AL 2/2014 proposes to decrease appropriations for the
school milk scheme (budget item 05 02 12 08) by EUR 3 million,
in line with provisional figures on execution in 2013 that point towards a
somewhat lower uptake of the scheme in Member States than initially expected.
Accordingly, the assumptions of the 2014 DB have been revised and a lower
amount is now proposed. Furthermore, appropriations needed in 2014 for private
storage of butter (budget item 05 02 12 04) are reduced by EUR 3 million,
reflecting the smaller quantities for which aid requests were presented in
2013.

Appropriations for budget
article 05 02 15 (pigmeat, eggs and poultry, bee-keeping and other
animal products) are proposed to be decreased by EUR 27 million,
reflecting revised needs for export refunds for poultry (budget item 05 02 15 05)
after refund rates have been set at zero.

05 03 3⁄4 Direct Aids (appropriations + EUR 206 million)

(in million EUR, rounded figures at current prices)

Direct Aids || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

Before financial discipline (without the ‘Reserve for crises in the agricultural sector’)

Needs || 42 888 || + 38 || 42 926

Estimated assigned revenue available in 2014 || 600 || + 400 || 1 000

Appropriations requested || 42 288 || - 362 || 41 926

After financial discipline (including the ‘Reserve for crises in the agricultural sector’)

Needs || 41 841 || + 606 || 42 447

Estimated assigned revenue available in 2014 || 600 || + 400 || 1 000

Financial discipline || 1 471 || - 569 || 903

Appropriations requested || 41 241 || + 206 || 41 447

Compared
to the 2014 DB, appropriations requested for chapter 05 03 are
revised upwards by EUR 206 million. This change is the combined
effect of somewhat higher needs before financial discipline (+ EUR 38 million)
and a lower amount of the financial discipline (EUR 569 million),
which are parially compensated by an increase in the amount of assigned revenue
(EUR 400 million). The most significant variations affect the Single
Payment Scheme (SPS), the Single Area Payment Scheme (SAPS) and specific
support measures under Article 68 of Council Regulation (EC) No 73/2009.

AL 2/2014 reduces the
appropriations for the SPS (budget item 05 03 01 01) by
EUR 24 million compared to the 2014 DB. Needs for this scheme
(before financial discipline) have been reduced by around EUR 79 million,
corresponding to the transfer of some Member States to coupled measures under
Article 68 of Regulation (EC) No 73/2009. Furthermore, the financial
discipline amount applied to this budget item has been reduced by EUR 455 million,
while the revenue assigned to it has increased by EUR 400 million.

For the SAPS
(budget item 05 03 01 02) AL 2/2014 proposes to increase
the budget appropriations by EUR 80 million, of which EUR 23 million
correspond to higher needs compared to the 2014 DB and EUR 57 million
to the modification of the financial discipline amount. The higher needs are
mainly explained by the modification of the agricultural area under the SAPS in
one Member State, the decision of another Member State to transfer EUR 7 million
to coupled support under Article 68 of Regulation (EC) No 73/2009 as
well as the expected evolution of execution in 2014 taking into account the
most recent figures from 2013.

(in million EUR, rounded figures at current prices)

Decoupled direct aids[9] || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

05 03 01 01 3⁄4 SPS (Single Payment Scheme) || 30 107 || - 24 || 30 083

05 03 01 02 3⁄4 SAPS (Single Area Payment Scheme) || 7 302 || + 80 || 7 382

Total || 37 409 || + 56 || 37 465

AL 2/2014 proposes to
increase budget appropriations for the specific support under Article 68
of Regulation (EC) No 73/2009 by EUR 14 million for decoupled
support (budget item 05 03 01 05) and by EUR 102 million
for coupled support (budget item 05 03 02 44). While needs for decoupled
specific support measures increase only slightly compared to the DB 2014
(+ EUR 5 million), needs for coupled specific measures change
more substantially (+ EUR 88 million). This corresponds mostly
to the transfer by some Member States from the SPS and SAPS to the decoupled
support under Article 68 as mentioned above, combined with an adjustment
in the expected execution rate.

(in million EUR, rounded figures at current prices)

Direct Aids[10] || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

05 03 01 05 3⁄4 Decoupled support || 473 || + 14 || 487

05 03 02 44 3⁄4 Coupled support || 987 || + 102 || 1 089

Total || 1 460 || + 116 || 1 576

There are some other
changes for budget lines within chapter 05 03, but the variations are very
small, in particular for lines related to coupled direct aids. These variations
compared to the 2014 DB are mostly related to the modification of the
amount of financial discipline applied to each individual budget item:

(in million EUR, rounded figures at current prices)

Direct Aids[11] || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

05 03 01 03 3⁄4 Separate sugar payment || 274,0 || + 3,0 || 277,0

05 03 02 06 3⁄4 Suckler cow premium || 882,0 || + 20,0 || 902,0

05 03 02 07 3⁄4 Additional suckler cow premium || 47,0 || + 2,0 || 49,0

05 03 02 13 3⁄4 Sheep and goat premium || 21,0 || + 2,0 || 23,0

05 03 02 39 3⁄4 Additional amount for sugar beet and cane producers || 20,0 || + 1,0 || 21,0

05 03 02 40 3⁄4 Area aid for cotton || 230,0 || + 9,0 || 239,0

05 03 02 50 3⁄4 POSEI – EU support programmes || 406,0 || + 1,0 || 407,0

05 03 02 52 3⁄4 POSEI – Aegean Islands || 19,0 || - 1,0 || 18,0

05 03 02 99 3⁄4 Other (direct aids) || 12,2 || - 2,5 || 9,7

Total || 1 911,2 || +35,5 || 1 946,7

05 07 Audit of agricultural expenditure (appropriations + EUR 53,4 million)

(in million EUR, rounded figures at current prices)

Audit of agricultural expenditure || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

05 07 02 3⁄4 Settlement of disputes || 6,8 || + 53,4 || 60,2

Total || 6,8 || + 53,4 || 60,2

Appropriations for budget
article 05 07 02 (Settlement of disputes) need to be increased by EUR 53,4 million
to cover the potential reimbursement of compensatory interests under national
law of the Member State following the Court of Justice judgement in case
C-113/10 Jülich et al. invalidating the Commission Regulations fixing sugar
production levies for marketing years 2002/03 to 2005/06.

05 08 Policy strategy and coordination (appropriations + EUR 3 million)

(in million EUR, rounded figures at current prices)

Policy strategy and coordination || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

05 08 06 3⁄4 Enhancing public awareness of the common agricultural policy || 32,6 || + 3,0 || 35,6

Total || 32,6 || + 3,0 || 35,6

Appropriations for budget
article 05 08 06 (Enhancing public awareness of the common
agricultural policy) are proposed to be increased by EUR 3 million to
finance information campaigns with a particular focus on corporate aspects of
the EU policy related to the 2014-2020 MFF programming period, as far as the
objectives of the CAP are concerned.

3.3         International
fisheries agreements

As foreseen in point C of Part II of the draft
Interinstitutional Agreement (IIA)[12], the Commission has examined the most recent information available
concerning fisheries agreements. To reflect the latest situation, i.e. the
recent conclusion of bilateral agreements with Ivory Coast[13], Gabon[14], the Comores
Islands and Seychelles[15], the Commission proposes to shift commitment and payment
appropriations from the reserve article 40 02 41 to budget article
11 03 01 Establishing a governance framework for fishing activities
carried out by Union fishing vessels in third country waters (SFAs), for an
amount of EUR 7,3 million. Furthermore, to cover the payment appropriations
for the sectoral support component in the agreement with Mauritania for the
second year, an additional amount of EUR 3 million for payment
appropriations is proposed to be shifted from the same reserve article to the
operational line 11 03 01.

(in million EUR, rounded figures at current prices)

Sustainable fisheries agreements || Draft Budget 2014 (incl. AL1/2014) || Amending Letter  No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

Commitments || Payments || Commitments || Payments || Commitments || Payments

Operational line (11 03 01) || 22,4 || 22,4 || +7,3 || +10,3 || 29,7 || 32,7

Reserve (40 02 41) || 122,7 || 122,7 || -7,3 || -10,3 || 115,3 || 112,3

Total || 145,0 || 145,0 || 0,0 || 0,0 || 145,0 || 145,0

3.4         Changes
to the budgetary remarks

The budgetary remarks for the following chapters,
articles and items have been updated:

Heading || Explanation

Expenditure

05 02 || Interventions in agricultural markets || Figures for assigned revenues

05 02 11 03 || Hops – Aid to producer organisations || Budgetary remarks

05 03 || Direct aids || Figures for assigned revenues

11 03 01 || International fisheries agreements || Change in budgetary remarks: table

Revenue

6 7 0 1 || Clearance of EAGF accounts – Assigned revenue || Figures for assigned revenue

6 7 0 2 || EAGF irregularities – Assigned revenue || Figures for assigned revenue

6 7 0 3 || Superlevy from milk producers – Assigned revenue || Figures for assigned revenue

4            Delegation
of spending programmes to executive agencies

4.1         Reasons for delegation

4.1.1      Making
the best use of executive agencies

An important
element of the Commission’s proposals for the 2014-2020 Multiannual Financial
Framework (MFF) was to simplify and rationalise further the administration of
the EU institutions, agencies and bodies to make it a modern, effective and
dynamic organisation, while reducing staffing by 5 % over 5 years[16]. This commitment
is now enshrined in the draft Interinstitutional Agreement (IIA) on budget
discipline, cooperation in budgetary matters, and sound financial management[17], on which the
European Parliament, the Council and the Commission have reached political agreement.

Within this general
context, the Commission has to make the best use of reduced human resources by
focusing more than ever on its core institutional tasks, such as policy-making,
implementation and monitoring of the application of EU law, and strategic
management, whilst guaranteeing the most effective and efficient implementation
of spending programmes for which it remains ultimately responsible.

In view of the positive
experience of management of EU programmes by the executive agencies, as
confirmed by the European Court of Auditors[18], the Commission proposals for the 2014-2020 MFF also included
making more use of the existing executive agencies to implement certain new
programmes.

At present, there are six
executive agencies, set up under Council Regulation No 58/2003[19]: the Executive
Agency for Competitiveness and Innovation (EACI), the Education, Audiovisual
and Culture Executive Agency (EACEA), the Executive Agency for Health and
Consumers (EAHC), the Trans-European Transport Network Executive Agency (TEN-T
EA), the European Research Council Executive Agency (ERCEA) and the Research
Executive Agency (REA).

The Regulation provides
for a clear division of programme management tasks between the Commission and
the executive agencies. The Commission’s departments perform tasks involving a
large measure of discretion implying policy choices, in particular: setting
objectives and priorities, adopting work programmes (including financing
decisions), representing the Commission in the programme committee and adopting
award decisions subject to comitology. The agencies are responsible for
implementing tasks, such as the launch and conclusion of grant and procurement
procedures, the adoption of award decisions, project monitoring, financial
control and accounting, the contribution to programme evaluation and various
support tasks.

4.1.2      Cost-benefit
analysis: chosen delegation scenario

A cost-benefit analysis
(CBA), required by the Regulation prior to any delegation of programmes to the
executive agencies, has been carried out over the last year and took into
account the political agreement reached by Parliament and Council in June 2013 on
the 2014-2020 MFF[20]. The CBA highlights the following comparative advantages of
delegating certain 2014-2020 programmes to the executive agencies:

3⁄4 
As a result of their experience and
specialisation in specifically defined tasks, the
agencies guarantee a high quality of programme management and better service
delivery in terms of faster contracting, faster approval procedures for
technical and financial reports and quicker payments.

3⁄4 
Giving the agencies coherent programme
portfolios will create synergies between closely related policy domains and
foster knowledge spill-over. For example, pooling all aspects of the small and
medium-sized enterprises (SME) instrument that falls under the Framework
Programme for Research and Innovation (Horizon 2020) is expected to result in
economies of scale, easier coordination and consistency in delivery of
services. At the same time, all potential beneficiaries will have a single
entry point.

3⁄4 
The new programmes can capitalise on the
agencies’ existing communication and outreach channels, which have developed
over time to keep them close to beneficiaries and to improve the EU’s
visibility as the promoter of the programmes. In particular, the agencies
provide an increased level of direct exchanges with beneficiaries through ‘info days’, kick-off meetings for larger and multi-annual projects,
and monitoring visits.

3⁄4 
Continuous simplification of processes and
procedures (e.g. simplified forms of grants, proportionate controls and
electronic application forms) results in higher productivity, which should
further increase with simpler procedures for the new programmes.

3⁄4 
The lower number of full-time equivalents (FTEs)
required to manage the programmes and the scope for recruiting a larger
percentage of contract agents at the executive agencies than at the Commission
entails significant savings compared with the in-house scenario.

The CBA compared four
scenarios depicting varying levels of programme delegation: an in-house
scenario in which new programmes would be managed by the Commission while
EAs would remain responsible for the delivery of legacy work (2007–2013
programmes); an initial scenario for delegation defined by the
Commission; and two alternative scenarios exploring options for
delegation different from that of the initial scenario.

The CBA pointed to the ‘alternative
scenario 2’[21] as the most efficient in terms of cost savings and qualitative
benefits than the other scenarios taken into consideration. Since the EAs will
benefit from economies of scale as they become larger, this scenario would lead
to the highest estimated efficiency gains (EUR 509 million at present
value[22] over the 2014-2020 period) in relation to the in-house scenario.

4.1.3      Refining
the cost-benefit analysis

On the basis of the CBA,
the Commission has defined an overall approach for the delegation of the
management of operational programmes to the executive agencies for the period
2014-2020. Besides taking into account the latest major developments in the
still on-going negotiations between the European Parliament and the Council on
the legal acts of programmes to be delegated, the Commission has placed
particular emphasis on the safeguarding of two key objectives in the delegation
process:

3⁄4 
Productivity: to ensure a sustained or improved
level of underlying productivity in each of the agencies compared to 2013, the
staffing numbers of all agencies have been reviewed;

3⁄4 
5 % staff reduction: to reconcile the
staffing levels of the executive agencies with the overall 5 % staff
reduction in all EU institutions and bodies, a 5 % reduction has been
applied to the 2013 staffing levels of all executive agencies, to be spread
evenly over the 2014-2020 period, and to be compared with the initial assessment
of the resources to be allocated to each agency. As for all EU institutions and
bodies, the 5 % staff reduction is accompanied by the increase in working
hours from 37,5 to 40 hours per week.

4.1.4      Adjusting
the ‘steady state’ approach applied in the 2014 DB

The 2014 Draft Budget was
based on a ‘steady state’ approach, whereby the staffing and subsidy levels of
each executive agency was kept constant at the 2013 level, awaiting the results
of the cost-benefit analysis and the subsequent review of the CBA results as
part of the Commission’s proposals for the delegation of spending programmes.
The adjustments made in this Amending Letter take account of the resources
implications of the foreseen delegation of the 2014-2020 programmes, both on
the side of the executive agencies and on the side of the Commission, as outlined
below.

4.2         Proposed
delegation of programmes by MFF heading

The level of operational
appropriations to be managed by the executive agencies for the programmes
concerned is foreseen to increase substantially over the next MFF period,
whereas the agencies will also remain responsible for the management of the
outstanding commitments for the programmes currently delegated. The growing
workload for programmes under the 2014-2020 MFF should be seen in connection
with the gradually decreasing workload related to the management of 2007-2013
programmes. The spending programmes foreseen to be delegated to executive
agencies by MFF heading are set out below.

Full details on the
envelopes of operational approprations foreseen to be managed by the executive
agencies are provided in the legislative financial statements accompanying the
Commission proposals to re-establish the six executive agencies and extend their mandates
and lifetime (see section 4.5 below).

3⁄4 
Heading 1a – Competitiveness for growth and
jobs

Several new programmes
under heading 1a are foreseen to be delegated to executive agencies, including
the ICT and Energy strands of the Connecting Europe Facility. Furthermore, a
series of programmes currently delegated to EACI, EACEA, TEN-T EA, ERCEA and
REA are foreseen to be continued in the executive agencies. This concerns
notably substantial parts of Horizon 2020, COSME, Erasmus+ and the
Transport strand of the Connecting Europe Facility.

3⁄4 
Heading 2 – Sustainable growth: natural
resources

Two new programmes
under heading 2 are foreseen to be delegated to executive agencies, as
from 2014: LIFE – Environment and Climate Action and certain activities under EMFF
– Fisheries Control, Integrated Maritime Policy and Scientific Advice.

3⁄4 
Heading 3 – Security and citizenship

Five programmes under
heading 3 are foreseen to be delegated to executive agencies. This concerns the
continuation of programmes currently delegated to EACEA and EAHC: Creative
Europe, Europe for Citizens, Consumer Protection, Public Health and Better
Training for Safer Food (transferred from heading 2 in the 2007-2013 MFF).

3⁄4 
Heading 4 – Global Europe

Two programmes under heading
4 are foreseen to be delegated to executive agencies: the projects in the field
of higher education which are currently delegated to EACEA as well as the new
programme for EU Aid Volunteers.

4.3         Impact
on human and financial resources in the executive agencies

The Commission intends to keep
the same number of executive agencies. However, it proposes to adapt the names
of three of the six current agencies, to reflect the extended scope of their
mandates, namely:

3⁄4 
The Executive Agency for
Competiveness and Innovation (EACI) will become the Executive Agency for Small
and Medium-sized Enterprises (EASME);

3⁄4 
The Executive Agency for Health and Consumers (EAHC)
will become the Consumers, Health and Food Executive Agency (CHAFEA); and

3⁄4 
The Trans-European
Transport Network Executive Agency (TEN-T EA) will become the Innovation and Networks
Executive Agency (INEA).

The overview table below
compares, agency by agency, the total level of operational appropriations
managed by the agencies with the number of human resources (FTE) and the corresponding
EU contribution to cover the running costs of the agencies. The table presents
the situation in 2013, the ‘steady state approach’ as originally foreseen in
the 2014 DB and the changes proposed in the present Amending Letter.

(in million EUR, rounded figures at current prices)

Executive agency || Budget 2013 || Draft Budget 2014 || Amending Letter 2/2014 || DB 2014 (incl. AL 2)

Envelope managed || Running costs || Staff (FTE) || Envelope managed || Running costs || Staff (FTE) || Envelope managed || Running costs || Staff (FTE) || Envelope managed || Running costs || Staff (FTE)

EASME (former EACI) || 583 || 15,680 || 159 || pm || 15,827 || 144 || 1 194 || + 15,321 || + 164,5 || 1 193,5 || 31,148 || 308,5

EACEA || 847 || 48,012 || 431 || pm || 47,546 || 431 || 543 || - 0,004 || + 4,9 || 543,3 || 47,542 || 435,9

CHAFEA (former EAHC) || 68 || 7,070 || 50 || pm || 7,070 || 50 || 76 || - || - || 76,3 || 7,070 || 50,0

INEA (former TEN-T EA) || 1 470 || 9,805 || 100 || pm || 9,805 || 115[23] || 2 395 || + 4,371 || + 47,0 || 2 395,2 || 14,176 || 162,0

ERCEA || 1 707 || 39,000 || 389 || pm || 39,415 || 389 || 1 451 || - || - || 1 451,0 || 39,415 || 389,0

REA || 1 171 || 49,300 || 558 || pm || 50,298 || 558 || 1 603 || + 6,071 || + 22,4 || 1 603,0 || 56,369 || 580,4

Total || 5 846 || 168,867 || 1 687 || pm || 169,961 || 1 687 || 7 262 || + 25,759 || + 238,8 || 7 262 || 195,720 || 1 925,8

As shown in the table, the
overall financial envelope to be managed by executive agencies as a whole in
2014 increases by 24,2 % compared to 2013. The overall increase in the number
of staff in 2014 (+ 14,2 %) is mostly concentrated in EASME (former EACI), and
to a lesser extent in INEA (former TEN-T EA) and REA, whereas no staff increase
is foreseen for CHAFEA (former EAHC) and ERCEA.

The targeted increase in
human resources for EASME, INEA and REA will translate into an increase in the
EU contribution to cover their running costs. The corresponding salary needs of
the additional staff numbers in the executive agencies have been calculated on
an eight month basis, to take into account the estimated time required for
recruitment. However, the increase in expenditure of the agencies is offset by
a correponding decrease of administrative expenditure in the budget, as set out
below.

4.4         Impact
on human and financial resources in the Commission

4.4.1      Transfer
of tasks to executive agencies: savings in the Commission

Part of the increased workload
for the executive agencies will result from further delegation of programmes
currently implemented by Commission services. The transfer of those
implementing tasks will save human resources in the Commission (see below),
since they are no longer carried out in the Commission. For 2014, the CBA estimates the maximum
number of additional officials to be seconded to executive agencies (‘frozen’
posts) at 28 posts, whereas the overall number of posts
‘freed’ in the Commission is estimated at 30 FTEs[24].

In the past,
those ‘freed’ human resources were redeployed to other tasks in accordance with
Article 13(6)(c) of Council Regulation No 58/2003. Given the Commission’s
commitment to the overall reduction in staff, and with a view to ensuring budget
neutrality with regard to administrative expenditure, the human resources ‘freed’
in the Commission as a result of delegating programme management will translate
into a reduction in the number of posts in its establishment plan (on top of
the general 5 % staff reduction in the Commission
over the period 2013-2017) and related expenditure, to
offset the expenditure corresponding to the additional FTEs in the executive agencies.

Likewise,
expenditure related to posts ‘frozen’ to take account of secondments to the
executive agencies will also be reduced, accordingly. More
details on freed and frozen posts by executive agency are presented in the
tables below.

Posts ‘frozen’ in
the Commission establishment plans

Executive agency || Draft Budget 2014 (incl. AL1/2014) || Amending Letter No 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

EASME (former EACI) || 9 || 14 || 23

EACEA || 34 || - || 34

CHAFEA (former EAHC) || 6 || - || 6

INEA (former TEN-T EA) || 7 || 9 || 16

ERCEA || 14 || - || 14

REA || 24 || 5 || 29

Total || 94 || 28 || 122

Posts to be ‘freed’
in the Commission establishment plans

Executive agency || Freed posts in 2014 || Freed posts in 2014-2020*

Establishment plan posts || Contract agents (FTE) || Establishment plan posts || Contract agents (FTE)

EASME (former EACI) || - || 8,0 || 93 || 52,2

EACEA || - || 1,1 || - || 1,1

CHAFEA (former EAHC) || - || - || 6 || 3,2

INEA (former TEN-T EA) || - || 6,0 || 95 || 46,9

ERCEA || - || - || 20 || -

REA || 9 || 5,8 || 104 || 52,2

Total || 9 || 20,9 || 318 || 155,6

- As estimated in the cost-benefit analysis.

4.4.2      Ensuring
overall budgetary neutrality

The expected efficiency
gains of the delegation scenario chosen and the resources to be freed in the
Commission departments by delegating tasks to executive
agencies will allow a bigger budget to be implemented
with fewer resources compared to the in-house scenario while guaranteeing a
high quality of programme management. For these reasons, the Commission proposes
to delegate these tasks to the executive agencies. However, the savings in the
Commission which result from the ‘freed’ and ‘frozen’ posts identified in the
CBA, as shown in the tables in section 4.4.1 above, are insufficient to fully offset
the additional expenditure to cover the running costs of the executive
agencies. To achieve budget neutrality over the period, the Commission will
offset the increase in expenditure on additional human resources in executive agencies by further reducing its
own human resources (officials and contract agents) beyond the ‘freed’ and ‘frozen’
posts identified in the CBA.

To this end, the Commission
has reviewed its own internal organisation, so as to increase the number of
posts/contract agents to be freed in order to offset the cost of additional
human resources in executive agencies. The review of its own structures has allowed the Commission to propose
to free in 2014 a further 114 FTEs in addition to the 58 FTEs
identified by the CBA to be freed (30 FTEs) and frozen (28 FTEs). The
total number of ‘freed’ and ‘frozen’ posts is shown in the table below:

‘Freed’ and ‘frozen’ posts: ensuring budgetary neutrality || Total number of freed and frozen posts in 2014 || Total number of freed and frozen posts in 2014-2020

Establishment plan posts || Contract agents (FTE) || Establishment plan posts || Contract agents (FTE)

Total ’freed’ || 120 || 24 || 484 || 165

Total ‘frozen’ || 28 || - || 64 || -

Total || 148 || 24 || 548 || 165

As mentioned above, the
proposed reduction in the number of posts in the Commission establishment plans
corresponding to the posts ‘freed’ in the Commission comes on top of the general 5 % staff reduction in the Commission over the period
2013-2017.

In terms of administrative
expenditure, the number of freed and frozen posts in 2014 corresponds to EUR 14,0 million
in savings in the Commission, of which EUR 4,9 million under heading 5. The remaining
administrative savings are spread across the other operational headings, mostly
linked to research staff and contract agents financed under Horizon 2020. This
reflects that implementing tasks are proposed to be shifted from the Commission
to the executive agencies.

4.4.3      Keeping
the financial envelopes of programmes unchanged

in order to maintain the
financial envelopes of spending programmes unchanged, the increase in the
running costs of the executive agencies is offset by a corresponding reduction
of Commission administrative expenditure, either under heading 5 or under other
headings, notably for research administrative expenditure under heading 1a.

The net impact that the additional
staff and the corresponding administrative expenditure required to manage the
growing level of operational appropriations in the executive agencies has on
the financial envelopes of the programmes concerned, depends on the source of
the offsetting in the Commission:

3⁄4 
The transfer of tasks
previously carried out by Commission staff under heading 5 to the executive
agencies leads to ‘freed’ and ‘frozen’ posts and to corresponding savings of
EUR 4,9 million in administrative expenditure under heading 5.

3⁄4 
As for the administrative support expenditure
charged on the financial envelope of spending programmes under other headings,
expenditure foreseen to be made directly by the Commission before delegation
will finance the running costs of the executive agencies after delegation. This
also applies to certain other administrative support expenditure directly
linked to programme implementation which will be incurred in the agencies after
delegation, such as development of IT systems. This shift has no impact on the
financial envelope of the programmes: the balance between administrative and
operational appropriations within the envelope remains unchanged.

3⁄4 
In general, the reduction of administrative
support expenditure under the operational headings is sufficient to finance the
increased running costs of the executive agencies, with no impact on the
operational appropriations within the financial envelope of the programmes
concerned. For three programmes under heading 4 an increase in the
administrative support expenditure in the Commission is requested, with a
corresponding reduction of the subsidy previously foreseen for EACEA[25]. In three cases,
however, a relatively limited contribution from the relevant programme to cover
the running costs of the executive agency from the operational appropriations
of the programmes is necessary to ensure their proper implementation[26].

The table below shows the
way in which the increases in expenditure to cover the running costs of the
executive agencies are foreseen to be offset through each of the three sources
set out above:

Offsetting of the increased running costs of the executive agencies, while keeping the envelopes unchanged || In EUR million

Increase in expenditure to cover running costs of six executive agencies stemming from further delegation || + 25,759

Reduced administrative expenditure under heading 5 resulting from delegating tasks currently managed by the Commission || - 4,851

Reduced administrative and support expenditure under other headings resulting from delegating tasks currently managed by the Commission || -23,013

Other offsettings within the financial envelope of programmes || -2,747

Total || -4,851

The extended delegation to
the executive agencies leads to a reduction of the overall level of
administrative expenditure, as reflected in the savings in heading 5 (EUR 4,9
million). Further details of the impact of the proposed delegation package on
human and financial resources in 2014 are presented in the budgetary Annex.

4.5         Delegation
process: next steps

On 4 October 2013, the
Commission transmitted a full set of delegation documents to the European
Parliament and the Council, consisting of an information note setting out the
main elements of the foreseen delegation package, as well as six draft
delegation proposals re-establishing the executive agencies and extending their
mandates and lifetime.

In accordance with the
procedure laid down in Regulation 58/2003, the Committee on Executive
Agencies is called upon to deliver an opinion on each of the six individual
draft Commission Implementing Decisions. Subject to the
positive opinion of the Committee on each of the six individual proposals for
delegation, provided that neither branch of the
budgetary authority has raised any objections, and the basic acts of the
2014-2020 programmes are adopted in due time by the legislative authority, the Commission intends to adopt the draft proposals by the end of
November 2013.

5            Creation of function group AST/SC

5.1         Staff
Regulations review: creation of the new function group AST/SC

Further to the Commission
proposal to amend the Staff Regulations of Officials and the Conditions of Employment
of Other Servants of the European Union (hereinafter ‘Staff Regulations’)[27], in June 2013 the European Parliament and the Council reached
a political agreement on the review of the Staff Regulations. The revised text
will enter into force on 1 January 2014.

As part of the political
agreement, Parliament and Council endorsed the Commission proposal to modify Article 5
of the Staff Regulations, by creating a new function group in the establishment
plans for Secretaries and Clerks comprising six grades (AST/SC 1-6), in
addition to the existing function groups for Administrators (AD) and Assistants
(AST).

5.2         Impact on establishment
plans

This Amending Letter contains
the necessary changes to the establishment plans to create the new structure
for the function group AST/SC, for the institutions as well as for the agencies
and other bodies. The revised establishment plans are included in the budgetary
Annex.

The Commission proposes to
create the structure for the new function group AST/SC in the establishment
plans of all EU institutions and bodies, as from 1 January 2014. The actual number
of posts to be included in the new function group AST/SC, however, will result
from the transformation of existing AST posts for secretaries and clerks. Consequently,
the number of staff concerned will depend on the number of existing AST staff leaving,
for instance on retirement, who will be replaced with new staff having passed a
competition for the AST/SC function group.

Awaiting a reliable
estimate of the number of AST/SC posts required in 2014, the Commission proposes
to create the new AST/SC function group without indicating at this stage the
exact number for each grade, unless individual institutions have already identified
the expected level of conversion of AST posts into AST/SC posts[28]. The new
structure will be filled progressively as from 2014, in accordance with Article 50
of the Financial Regulation, which allows each institution and body, under
certain conditions, to modify its estblishment plan by up to 10 % of the
posts authorised in the establishment plan.

6            Conclusion

This
Amending Letter No 2/2014 constitutes the Commission’s second and final
update of the 2014 Draft Budget, prior to the start of the Conciliation. On
this basis, the European Parliament and the Council are expected to take the
revised estimates into account in view of their deliberations on the 2014
budget, within the deadlines foreseen by the Treaty.

7            Summary table by heading of the multiannual financial
framework

Heading || Draft Budget 2014 (incl. AL1/2014) || Amending Letter 2/2014 || Draft Budget 2014 (incl. AL1 to 2/2014)

CA || PA || CA || PA || CA || PA

1. || Smart and inclusive growth || 63 924 732 827 || 62 788 667 818 || || || 63 924 732 827 || 62 788 667 818

Ceiling || 63 973 000 000 || || || || 63 973 000 000 ||

Margin || 126 647 173 || || || || 126 647 173 ||

1a || Competitiveness for growth and jobs || 16 433 352 827 || 11 694 938 804 || || || 16 433 352 827 || 11 694 938 804

Ceiling || 16 560 000 000 || || || || 16 560 000 000 ||

Margin || 126 647 173 || || || || 126 647 173 ||

1b || Economic, social and territorial cohesion || 47 491 380 000 || 51 093 729 014 || || || 47 491 380 000 || 51 093 729 014

Ceiling || 47 413 000 000 || || || || 47 413 000 000 ||

Margin || 21 620 000 || || || || 21 620 000 ||

Flexibility Instrument || 78 380 000 || || || || 78 380 000 ||

Margin || 0 || || || || 0 ||

2. || Sustainable growth: natural resources || 59 247 714 684 || 56 532 492 046 || || || 59 247 714 684 || 56 532 492 046

Ceiling || 59 303 000 000 || || || || 59 303 000 000 ||

Margin || 55 285 316 || || || || 55 285 316 ||

Of which: European Agricultural Guarantee Fund (EAGF) — Market related expenditure and direct payments || 43 778 100 000 || 43 776 956 403 || || || 43 778 100 000 || 43 776 956 403

Sub-ceiling || 44 130 000 000 || || || || 44 130 000 000 ||

Net transfer between EAGF and EAFRD || 351 900 000 || || || || 351 900 000 ||

Margin || 0 || || || || 0 ||

3. || Security and citizenship || 2 139 460 732 || 1 668 006 729 || || || 2 139 460 732 || 1 668 006 729

Ceiling || 2 179 000 000 || || || || 2 179 000 000 ||

Margin || 39 539 268 || || || || 39 539 268 ||

4. || Global Europe || 8 175 802 134 || 6 251 299 380 || || || 8 175 802 134 || 6 251 299 380

Ceiling || 8 335 000 000 || || || || 8 335 000 000 ||

Margin || 159 197 866 || || || || 159 197 866 ||

5. || Administration || 8 595 115 307 || 8 596 738 107 || -4 851 000 || -4 851 000 || 8 590 264 307 || 8 591 887 107

Ceiling || 8 721 000 000 || || || || 8 721 000 000 ||

Margin || 125 884 693 || || || || 130 735 693 ||

Of which: Administrative expenditure of the institutions || 6 936 293 672 || 6 937 916 472 || -4 851 000 || -4 851 000 || 6 931 442 672 || 6 933 065 472

Sub-ceiling || 7 056 000 000 || || || || 7 056 000 000 ||

Margin || 119 706 328 || || || || 124 557 328 ||

6. || Compensations || 28 600 000 || 28 600 000 || || || 28 600 000 || 28 600 000

Ceiling || 29 000 000 || || || || 29 000 000 ||

Margin || 400 000 || || || || 400 000 ||

Total || 142 111 425 684 || 135 865 804 080 || -4 851 000 || -4 851 000 || 142 106 574 684 || 135 860 953 080

Ceiling || 142 540 000 000 || 135 866 000 000 || || || 142 540 000 000 || 135 866 000 000

Flexibility Instrument || 78 380 000 || || || || 78 380 000 ||

Margin || 506 954 316 || 195 920 || || || 511 805 316 || 5 046 920

|| Outside the multiannual financial framework (MFF) || 456 181 000 || 200 000 000 || || || 456 181 000 || 200 000 000

Grand Total || 142 567 606 684 || 136 065 804 080 || -4 851 000 || -4 851 000 || 142 562 755 684 || 136 060 953 080

[1]               OJ L 298,
26.10.2012, p. 1.

[2]               COM(2013)
450.

[3]               COM(2013) 644.

[4]               COM(2013) 655, 18.9.2013.

[5]               The EAGF sub-ceiling for 2014 amounts to EUR 44 130
million. After taking into account an amount of EUR 351,9 million to be
transferred to Rural Development that had already been incorporated in the 2014
DB, the net amount available for the EAGF (‘net sub-ceiling’) amounts to EUR 43
778,1 million. The EAGF needs for 2014 are assessed against such a net amount.

[6]               The rate is established in Commission Implementing
Regulation (EU) No 964/2013 of 9 October 2013 on fixing an adjustment rate to
direct payments provided for in Regulation (EC) n° 73/2009 in respect of
calendar year 2013. AL 2/2014 reduces the adjustment rate from the initial 4,981759%
in the 2014 DB to 4,001079%, taking account of the reduction in the threshold
from EUR 5 000 to EUR 2 000 in line with the agreement on
the CAP reform.

[7]               Article 41 and Annex IV of Regulation (EU)
xx/xxxx of the European Parliament and of the Council establishing a common
organisation of the markets in agricultural products (Single CMO Regulation),
which still needs to be adopted formally by the EP and the Council
(COM(2012) 535).

[8]                      Regulation (EU) No 228/2013 of the European Parliament and of the
Council of 13 March 2013 laying down specific measures for agriculture in the
outermost regions of the Union and repealing Council Regulation (EC) No
247/2006.

[9]               In appropriations and after financial discipline.

[10]             After financial discipline.

[11]             After financial discipline.

[12]             Draft Interinstitutional Agreement between the European
Parliament, the Council and the Commission on budgetary discipline, cooperation
in budgetary matters and on sound financial management.

[13]             Provisional application of the Protocol following adoption
of Council Decision 2013/303/EU (OJ L 170, 22.6.2013, p. 1).

[14]             The Council Decision on the provisional application (as
from 24 July 2013) of the Protocol has been adopted on 16 July 2013 but has not
yet been published in the Official Journal.

[15]             The Commission estimates that the Council Decisions on
the provisional application of Protocols related to these two agreements will
be in force as from 1 January 2014.

[16]             Communication
‘A Budget for Europe 2020’, p.21, COM(2011) 500, 29.6.2011.

[17]             Point [23] of the draft Interinstitutional Agreement on
budgetary discipline, cooperation in budgetary matters and on sound financial
management.

[18]             Special
Report No 13/2009, Delegating implementing tasks to executive agencies: a
successful option?.

[19]             Regulation
(EC) No 58/2003 of 19 December 2002 laying down the statute for executive
agencies to be             entrusted with certain tasks in the management of
Community programmes (OJ L 11, 16.1.2003, p. 1).

[20]             Draft
Council Regulation laying down the MFF for the years 2014-2020.

[21]             Within the ‘boundary conditions’ set by the Commission of
keeping the current number of executive agencies unchanged and having broadly
similar-sized agencies (in terms of their staffing), the contractor developed a
scenario in which certain programmes would be managed by other agencies
compared to the ‘initial scenario’, as follows: the new Space programme and the
societal challenge Food security, sustainable agriculture, marine and
maritime research and bio-economy under Horizon 2020 would be delegated to
REA, whereas EACI would manage the second and third generation of the
Intelligent Energy programme, the entire SME instrument under Horizon 2020 as
well as the Integrated Maritime Policy, Control and Scientific Advice actions
under the EMFF.

[22]              Calculated
following the Commission’s guidelines for impact assessments for policy
proposals (SEC(2009) 92),             applying the standard discount rate
of 4 % to future benefits to calculate their net present value.

[23]             This staffing number takes account of the proposed
transfer of the Marco Polo programme from EACI to INEA (15 FTE), since this
will become part of the CEF-Transport programme.

[24]             The actual breakdown between freed and frozen posts will
be fine-tuned in future annual budget procedures to adjust it to actual
secondments.

[25]             This concerns IPA (EUR 0,1 million), ENI
(EUR 1,0 million) and DCI (EUR 1,0 million), in order to
finetune the balance between tasks carried out in the Commission and in the
executive agency.

[26]             This concerns CEF-Energy (EUR 0,8 million),
EMFF (EUR 1,4 million) and EU Aid Volunteers
(EUR 0,5 million), for which the level of administrative support
expenditure requested in the 2014 DB did not (fully) reflect actual needs
in 2014.

[27]             COM(2011) 890, 13.12.2011.

[28]             The following institutions have provided detailed
estimates of the grade structure to be included in the establishment plans for
the new function group SC: European Parliament (Section I): 5 SC 1 and
25 SC 2; European Council and Council (Section II): 15 SC 1; and Court
of Auditors (Section V): 2 SC 2.